Federal Reserve Chair Kevin Warsh has unveiled a historic overhaul of the central bank's calendar, announcing that the rate-setting committee will cut its voting meetings from eight a year to six. One annual gathering will become a strategy-only session with no rate vote in 2027, and a second will follow in 2028. The announcement came at Warsh's press conference on Wednesday 28 October, after the committee held its benchmark rate steady. It is an unprecedented departure from the Fed's longstanding calendar.

A press conference with few forward clues

Warsh gave traders little of the forward guidance they wanted. He said he did not believe in forward guidance “absent a crisis”, and declined to discuss other policymakers' rate expectations. He insisted politics “played no role”, saying he had heard no reference to elections during two days of meetings. On the economy, he said policy was working and tightening financial conditions, while noting credit had tightened for some technology and AI financing. He also introduced a technology task force on AI's economic impact.

Oil, rates and the December question

Warsh addressed the link markets have watched all year: energy prices and interest rates. He said the correlation between market interest rates and oil prices had been strong this year until recently, when rates rolled over while oil futures moved higher, and that he had taken note of it. Consumer prices rose 3.7% in the year to September, well above the Fed's 2% target, driven largely by energy prices linked to the Iran war. With fewer voting meetings ahead, each remaining decision will carry more weight, and markets will have to read the data, rather than the chair's hints, to judge what comes next.

Sources: Barchart, TradingView / Seeking Alpha press-conference live blog.